GLD & SLV: Why Are Gold and Silver Prices Rising Again?

The SPDR Gold Trust (GLD) and the iShares Silver Trust (SLV) are back on the rise as all the economic elements supporting higher precious metals prices are in place now. 

Gold and silver prices tend to rise in an economic environment marked by high inflation, a weakening U.S. dollar, low or declining interest rates, and geopolitical uncertainty. All these boxes can be checked now as Trump’s tariff and tax plans are inflationary, the dollar is weakening, the Fed is cutting rates, and tensions overseas are accelerating.  

Inflation reduces the real value of currency, driving investors toward precious metals as a hedge. A weaker dollar makes gold and silver more affordable in foreign markets, boosting demand. Low interest rates decrease the opportunity cost of holding non-yielding assets like metals. Additionally, periods of market volatility or geopolitical tension increase the appeal of these metals as safe-haven investments. 

Gold and Silver Prices in 2024 and Post-Election

Precious metals rarely outperform stocks, especially when stocks are outperforming themselves. For example, in the long term, it’s reasonable to expect precious metals to perform near the rate of inflation, which has historically been a bit higher than 3% per year, while stocks have averaged around 10%. 

In 2024, stocks have more than doubled their average return, yet gold and silver are handily outperforming the stock market benchmark S&P 500 index. Through the end of the third quarter, GLD had risen 27% and SLV was up 30% for the year while the stock market, as measured by the SPDR S&P 500 Trust ETF (SPY), was up nearly 22%. 

I use the end of Q3 as a pre-election measure because gold and silver prices both fell after Trump handily won the White House as investors grew concerned that his tariff and tax plans would spike inflation.  

From Nov. 6, the day after the election, gold and silver both fell by approximately 6% until recovering after Trump announced his nominee for Treasury Secretary, Scott Bessent, who’s measured economic policies eased inflation concerns. 

The Fed’s expected 25-basis-point rate cut next week and the rising tensions in the Middle East have also contributed to the recent comeback for precious metals. 

Gold and silver prices have now returned to their pre-election levels as the ideal setting for precious metals—sticky but not high inflation, lower interest rates, and geopolitical uncertainty—are all present but not overly worrisome.